Avoiding risk in hiring means avoiding innovation

Whatever the field, experienced outsiders can bring insights that come from not knowing what can’t be done

By David O. Hunt

Published: June 28, 2013

In the last decade, “thought leaders” have opined about the need for fresh eyes – the idea being that outsiders can bring new perspectives to old problems. This has been true for me, since many of my best accomplishments have come in situations where I lacked institutional blinders. In many instances, my disruptive ideas solved problems and created significant improvements in cost, performance or efficiency.

In today’s hypercompetitive marketplace, one must innovate continuously. (A former boss’ office sign read, “If you don’t obsolete what you do, your competition will do it for you.”)

As Dirk Willard wrote in a 2007 Chemical Processing magazine article titled, “Old Dogs Can Learn New Tricks,” “even an [experienced] engineer who knows nothing about your industry should be able to find something amiss or a potential cost saving.”

Whatever the field, experienced outsiders can bring insights that come from not knowing what can’t be done. For example, at one employer, I investigated bins of scrapped components -- the components were fine, the problem was faulty installation. A simple rework procedure saved over $200,000 in annualized scrap costs. Instead of blaming the supplier, as was standard, the situation was questioned and the problem solved.

Much has been written about the benefits of outside perspectives to cross-pollinate and bring in new ideas and best practices to avoid exactly this type of intellectual inbreeding. Yet despite the identified benefits of incorporating experiential diversity into a team, hiring managers sculpt requirements with laser-like precision to find a 17-sided peg for their 17-sided hole. (Often they are looking for someone to replace a veteran employee who left/retired, rather than succeed that person – an important distinction.)

According to blogger Scott Anthony, “innovation inbreeding” occurs “when innovation efforts are consistently led by the same group of people who have lived their life within the company. Even worse is when innovation efforts are contained within individual functions, geographies, or product lines.”

‘Fresh eyes perspective’

So if there are documented benefits to hiring outsiders, why don’t companies do it? I see two reasons.

First, companies have backed themselves into a corner through staff reductions. The catch phrase today is “hit the ground running.” Instead of hiring someone at a 90 percent match quickly and investing in training, managers obsess about finding that 17-sided peg, taking appalling amounts of time to search for that perfect fit.

How many projects languish because of this obsession for perfection? What stresses roll downhill to overworked employees, including the resentment this breeds? What happens to customer satisfaction when deadlines are missed and mistakes are made? There is a cost to not filling a position in a timely manner, just as there is a cost to making a bad hire.

Which brings me to the second reason: risk allocation.

If a manager hires someone who does not match the requirements perfectly, and that person doesn’t work out, the consequences fall solely on the hiring manager. If nobody is hired, the costs are diffused. Because of the focused impact if a “bad hire” is made, the safest thing to do is to not decide – and blame the applicant pool.

Not hiring a person from outside the industry because they lack specific knowledge ignores a fundamental truth: people can learn. By seeking perfection, companies not only limit the candidate pool unnecessarily, but delay solving problems.

Given the much-discussed benefits of hiring people with a “fresh eyes perspective,” by avoiding the risks of hiring people from outside the industry, managers are also missing out on a rich source of innovation and problem-solving.

What is the opportunity cost of innovations you don’t develop and problems you don’t solve? What price is paid by handicapping yourself compared to your competition by waiting for that person with an “S” on his chest? And shouldn’t these things be a consideration during the hiring process?

David Hunt is a senior-level mechanical engineer in the Nashua area. He can be reached at davidhunt@outdrs.net.

This article appears in the June 28 2013 issue of New Hampshire Business Review